Net profit for the period rose 31 percent to 132.7 million Swiss francs ($133.54 million), beating the 118 million franc average forecast by analysts polled by Reuters. Assets under management at the end of the first half of 2018 rose to a record 168.6 billion francs.

The Zurich-based bank raised its 2020 profitability targets, with the cost-income ratio now seen improving to less than 72 percent from a previous target of 75 percent, and the return on equity to exceed 14 percent, up from 12 percent.

Vontobel's 700 million franc acquisition of private money manager Notenstein La Roche in May from Swiss lender Raiffeisen adds girth to its wealth management division. Chief Executive Zeno Staub said the new arrival will result in better overall performance.

"Vontobel is well-positioned for the future and remains on course for growth," Staub said in a statement, adding that despite a relatively difficult market environment in the second half "we aim to further increase our already solid profitability" compared to 2017.

Staub said on a call that the initial weeks of the second half were typical for this time of year, as many clients are on vacation.

TOUGHER REGULATIONS

The number of private banks in Switzerland is shrinking, a consequence of tougher regulations and a global clampdown on efforts to avoid paying taxes that is forcing lenders to the world's wealthiest to cut costs, go in for mergers and acquisitions (M&A) or quit the business.

Against this backdrop, Staub has pinpointed acquisitions like Notenstein LaRoche as a means of expanding the 94-year-old asset manager's footprint. Should good opportunities present themselves, he said on Friday, Vontobel will strike again.

The integration of Notenstein La Roche is progressing as planned and should be wrapped up by the end of September, the CEO said, following the transaction's completion earlier this month.